Debts take their toll on us not only financially but also emotionally as they become a source of stress. However, it is possible to live without getting into debt, and it is only necessary to make a change of mentality that allows us to assume different consumption habits.
Nowadays, many people have their lives tied up because of usurious credits whose “payment facilities” were transformed into high interests that will take years to pay. In fact, it is estimated that people allocate 83% of their income to pay debts and urgent expenses that arise each month. However, it is possible to live without getting into debt, and it is enough to change the mentality and assume habits that facilitate saving.
- Create a cushion for unforeseen expenses
It is likely that throughout the year, you will have to face different unforeseen expenses that can shake your economy. In fact, it is estimated that 25.5% of people are forced to resort to a loan to deal with unforeseen events. Therefore, it is better that you plan your monthly expenses so that you can save 15% of your income.
- Use credit cards less
Many people think that it is convenient to have a credit card to deal with emergencies, but the truth is that these cards are almost never used for this purpose but are a constant temptation that encourages us to buy products that we really do not need. In fact, you should keep in mind that credit cards are a monthly loan, so if you do not pay off the debt on time, the interests will be activated, and they are generally very high. Therefore, it is better that you avoid using them or that you make sure you have the money in the account when the time of settlement arrives.
- Understand the loan mechanism
63.5% of people consider that they have lacked financial training at the time of signing the contracts. In fact, not knowing how the loan mechanism works can lead you to incur debts that you would not have otherwise assumed. For example, if an offer indicates that you will not pay interest for the first six months, that does not mean that it will not apply later. Many of these offers are designed so that people are encouraged to buy immediately, without considering the expenses they will have later.
- Shop using your savings
At present, almost all products and services can be purchased using credit, but the problem with paying with “comfortable instalments” is that interest rates are generally very high, so the final price shoots up. Therefore, a strategy to avoid debt is to save, in the old way, and buy only when you have the money in hand or at least a large part of it. In this way, you will also value the product or service much more.
- Reduce your needs
The ability to save has diminished as a result of the crisis, so it is important that we rethink our buying habits. In fact, it is not necessary to change the mobile every year, and if an appliance breaks, you can try to repair it instead of immediately buying a new one. To save and avoid debt, it is essential to change your attitude and understand that you can be happy with much less.